Maruti surges 8% on decision to seek shareholders approval for Guj plant

Business

oi-Sunil

By Sunil Fernandes

Updated: Tuesday, March 18, 2014, 10:12 [IST]

Shares in India's largest passenger car company, Maruti Suzuki surged 7 per cent, after the company said that it was planning to seek minority shareholder nod for its Gujarat plant to be set up as a unit of Suzuki Motor Corporation, Japan

Shareholders, especially institutional shareholders have been unhappy at the fact that the board had proposed that the passenger car facility in Gujarat would not be operated by it, but its parent, Japan's Suzuki Motor Corporation (SMC).

"The board of company has approved implementing the expansion through a 100 per cent Suzuki subsidiary as it would result in substantial financial benefit to company and its subsidiary," Maruti Suzuki (India) said in a filing to Bombay Stock Exchange earlier in Jan.

This action has not gone down with many shareholders, including institutional investors. If minority shareholders do not give their consent for the plant to be run by SMC the stock could rally even further.

The shares of the company were last trading at Rs 1861, up 7.16 per cent.

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